my image texture doesn't apply alpha
I had a similar issue.  I had to fix it with nodes.  Here's a screenshot showing how I did it.

After a log of experimenting, I found I had to add in a transparent BSDF into a mix shader with the Fac of the mix shader being the alpha color.

In the pic, the lower texture coordinate group did the trick for me.

If it doesn't work, let me know and I'll be glad to help.